cases

© 2005 CORNELL UNIVERSITY

DOI: 10.1177/0010880404273893
Volume 46, Number 2 275-283

Exporting a
North American
Concept to Asia
Starbucks in China

by JEFFREY S. HARRISON, EUN-YOUNG CHANG, CARINA GAUTHIER,

TODD JOERCHEL, JORGE NEVAREZ, and MENG WANG

S
10.1177/0010880404273893

In the past decade U.S.-based Starbucks has ex-
panded internationally, including opening coffee shops
in the People’s Republic of China. Still a tiny part of the
Chinese beverage market, Starbucks hopes to trade
on the growing popularity of Western brands among
China’s growing middle class. By focusing its attention
on its employees, Starbucks has created a strong ser-
vice culture that fits well in China.
Keywords: international growth; international expan-
sion; restaurant industry; Chinese business; Asian
business
tarbucks Coffee International, a subsidiary of
Starbucks Coffee Company, opened its first store
in southern China in 2002. The store, located in
Shenzhen, is owned by Coffee Concepts, a joint ven-
ture between Starbucks and Hong Kong’s Maxim
group, which had already opened thirty-two Starbucks
stores in Hong Kong between 2000 and 2002.1 At the
opening, Pedro Man, president of Starbucks Coffee
Asia Pacific, the Asian division of Starbucks Coffee
International, remarked,

MAY 2005 Cornell Hotel and Restaurant Administration Quarterly 275

CQ CASES EXPORTING A NORTH AMERICAN CONCEPT TO ASIA
As we celebrate the opening of our first
store in Southern China today, we mark
yet another milestone in the history and
tradition of more than 30 years at
Starbucks. The heart of the Starbucks
Although international expansion
is difficult for many American com-
panies, especially in Asia, some-
how the executives at Starbucks
have defied the odds—as they have
done all along.
brand lies in two cornerstones—our cof-
fee and our people. Our passion for cof-
fee means applying our coffee expertise
and the highest standards of excellence
to every detail of the coffee, from select-
ing and roasting the beans, to brewing
the perfect cup of coffee.
He added,
At the same time, our people are highly
valued partners in creating the unique
Starbucks Experience. It is their pas-
sion, knowledge, unsurpassed expertise,
and enthusiasm which help to create a
truly outstanding coffee experience for
our customers.2
Starbucks has continued to grow de-
spite near saturation in most attractive
U.S. markets and despite sometimes hos-
tile economic conditions. Although inter-
national expansion is difficult for many
American companies, especially in Asia,
somehow the executives at Starbucks have
276 Cornell Hotel and Restaurant Administration Quarterly
defied the odds—as they have done all
along.
From Inception to
U.S. Saturation to
International Expansion
Starbucks Coffee, Tea, and Spice
opened its first store in April 1971 in the
Pike Place Market in Seattle. Its original
owners, Jerry Baldwin and Gordon
Bowker, had a passion for dark-roasted
coffee, which was popular in Europe but
hard to find in the United States at the
time. “They founded Starbucks for one
reason: They loved coffee and tea and
wanted Seattle to have access to the best.”3
Starbucks stood not only for good-quality
coffee, especially dark-roasted coffee, but
also sought to educate its customers about
its products. Jerry, a lover of literature,
named the company Starbucks after the
first mate in Moby Dick, because it
“evoked the romance of the high seas and
the seafaring tradition of early coffee trad-
ers.”4 Recognizing the great potential of
the Starbucks concept, Howard Shultz and
David Olsen purchased Starbucks in 1987
for $3.8 million. Shultz and Olsen were
both veterans of the industry, having
owned their own successful coffeehouses.
As a private company, Starbucks grew in
the next five years from 6 retail outlets and
a roasting plant to 165 shops, located pri-
marily in the Pacific Northwest.5
Much of this success can be attributed
to a focus on the total guest experience and
the people employed to create that experi-
ence. Schultz and his team wanted to enlist
the hearts of people who would share a
sense of pride in the job they were doing.
They wanted to attract people who were
well educated and eager to communicate
their passion for coffee. Schultz embraced
a philosophy that would be vital to attract-
MAY 2005

ing and retaining the right kind of employ-
ees: “Treat people like family, and they
will be loyal and give their all. Stand by
people, and they will stand by you.”6 He
and his team viewed people as business
partners and not simply a line item.7 The
company provided training to its employ-
ees on the subtleties of coffee tasting.8
Wages and benefit programs were more
attractive than what competitors offered.
Employees also influenced the company’s
direction, as management included them
in discussions about plans, decisions,
strategies, and concerns. This people-cen-
tered operating philosophy continues to
this day. Starbucks’human resources poli-
cies have contributed to a turnover rate
that is well below the industry average.9
Rapid Growth
Building on early successes, Shultz and
Olsen wanted to expand Starbucks beyond
the Pacific Northwest. They rejected the
idea of franchising, however, because they
did not want to jeopardize the quality of
their products. To raise the additional cap-
ital needed for growth, in 1992 Shultz led
the company in an initial public offering,
raising $29 million. Shortly thereafter, the
company opened stores in Washington,
D.C., New York, and Boston.
As a supplement to the growth provided
by new outlets in the United States,
Starbucks has pursued a variety of innova-
tions and joint ventures. Starbucks experi-
mented with new concepts, such as
expanded food menus and drive-thru ser-
vice, but neither of those options was pur-
sued because management felt that they
took away from the core business.10 On the
other hand, a cold coffee drink called
Frappuccino brought new customers into
the shops and also led to a grocery-store
version marketed through a joint venture
with Pepsi. Other cooperative efforts have
MAY 2005
EXPORTING A NORTH AMERICAN CONCEPT TO ASIA CQ CASES
led to coffee sales in a variety of new out-
lets, including grocery stores, bookstores,
11
schools, airlines, cruise lines, and hotels.
Starbucks has also expanded its reach into
complementary markets. For example, the
company owns Tazo, an Oregon-based tea
company noted for its chai.12
Starbucks is viewed as one of the great
business success stories in the past two
decades. In total returns, it soared more
than 2,200 percent over the decade ending
in 2001, surpassing Wal-Mart, General
Electric, PepsiCo, Coca-Cola, Microsoft,
and IBM in total return.13 Starbucks’ sales
have increased an average of 20 percent
annually since the company went public
in 1992.14 As of 2001, Starbucks had
more than fifty-seven hundred retail loca-
tions and fifty-four thousand employees
worldwide.15
In spite of innovations and joint ven-
tures, Schultz’s team is hard-pressed to
grow profits in a home market that is
quickly becoming saturated, with thou-
sands of stores across the United States
and Canada. In Seattle, there is one
Starbucks outlet in every twenty-four
square miles, and in Manhattan Starbucks
has well over one hundred cafés, or about
one for every twelve thousand people.
Although total U.S. saturation is expected
in the near future, the company is con-
vinced that it can export its American-
brewed concept around the world. In July
2000, Schultz showed his commitment to
Starbucks’ plan to expand globally by
stepping down as CEO and assuming the
role of chief global strategist.16
Asian Expansion
Starbucks opened its first restaurant
outside North America in Tokyo in
August 1996. Japan was chosen because it
is the third largest coffee importer in the
world. Schultz believed that going to
Cornell Hotel and Restaurant Administration Quarterly 277
CQ CASES EXPORTING A NORTH AMERICAN CONCEPT TO ASIA
Japan was an essential part of Starbucks
International’s expansion plan. For the
company’s international operations,
Schultz decided that it was best to form
partnerships with local operators. The
Tokyo outlet was opened as a joint venture
with Japanese retailer and restaurant oper-
ator Sazabu.17 In six years, the number of
Japanese outlets has grown to 368, beating
Starbucks’ own projections.18
Starbucks now operates well over 1,000
international outlets, with hundreds more
on the drawing boards. A large portion of
its international business is in Asia, where
it has 850 locations (in Australia, Indone-
sia, Japan, Korea, Malaysia, the Philip-
pines, New Zealand, Singapore, Taiwan,
Thailand, the Chinese cities of Beijing and
Shanghai, and the Hong Kong and Macau
SARs).19 Starbucks plans to continue
expanding its presence throughout Asia,
and Schultz feels that one day it may be
operating more restaurants in Asia than it
does in North America.20
The Chinese Opportunity
The most populous Asian market, and
the one that possibly holds the most poten-
tial for long-term growth, is China. Under-
standing the opportunities and challenges
that Starbucks faces in China requires an
appreciation for the distinctive political,
economic, sociocultural, and market
forces that have been shaping that country
and its demand for coffee.
The Political Situation
in China
In spite of China’s recent history, the
nation is still a communist country. When
the People’s Republic of China was cre-
ated in 1949, Mao Ze Dong ruled the
country in a highly centralized way.21 Cou-
pons were distributed by each level of the
278 Cornell Hotel and Restaurant Administration Quarterly
government to the civilians to exchange
for daily necessities, for instance. This
practice continued until after the “cultural
revolution,” which was a ten-year struggle
between Mao Ze Dong and other commu-
nist leaders. After 1978, with the help of
the late premier Zhou En Lai, Deng
Xiaoping controlled the country. He grad-
ually introduced market-oriented reforms
to China and decentralized economic
decision making.22 Under Deng’s leader-
ship, China abandoned its old planning
and distribution system. As a result, the
national output quadrupled by 2000.
Successor Jiang Ze Min followed
Deng’s ideals and further opened China’s
market to foreign trade and investment.
China’s economy grew to second largest
in the world, after that of the United States
(measured by purchasing power parity),
even though by the year 2001, its GDP
per capita was only US$4,300.23 From Jan-
uary to September 2002, the amount of
foreign investment in China reached
US$39.56 billion, up 22.6 percent com-
pared with the same period in the previous
year.24
At the 16th Chinese Communist Party
Conference, held on November 8, 2002,
President Jiang stated that the country will
manipulate the market only by distribut-
ing resources, creating an environment
where all the economic players have equal
opportunity to use those resources to
enhance the movement of merchandise
and increase manufacturing. The govern-
ment will monitor the market, adjust the
economy, and manage public services.25
Reinforcing the idea of an open economic
policy, the government’s new policy
actions should reduce intervention in pri-
vately owned business with the hope of
attracting more foreign investment into
the country. Provincial leaders, who nor-
mally held their positions until age sev-
MAY 2005

enty, were replaced. Also, Hu Jintao was
elected the new president of China.
In 2001, with entrance into the World
Trade Organization (WTO), China began
to conduct business under some of the
same rules that apply to its largest trading
partners.26 Internal policy making will be
more transparent, and the government
function will be constrained by the guide-
lines of the WTO. Because Starbucks
entered the Chinese market before the
WTO accession, the company had to deal
with the nation’s rigid business policies.
Going forward, Starbucks may be able to
take advantage of the “WTO effect,”
which includes such policies as lower tar-
iffs for foreign investors.27
Economic Factors
in China
The Chinese market is considered one
of the most important in the world due to
its growth and size. Investment in that
market has come in waves, however. From
1978 to 1992, although the amount of
investment increased every year, the accu-
mulated amount was only US$23.4 bil-
lion.28 From 1992 to 1995, foreign invest-
ment in China entered a phase of rapid
development. This was followed by an
adjustment period of two years and a low
period of three years. Total foreign invest-
ment dropped from $45.5 billion in 1998
to $40.7 billion in 2000, a decline of 10.5
percent. After the adjustment period,
direct foreign investment in China experi-
enced a record increase of 14.7 percent
during the first nine months of 2002. 29
The development of the Chinese econ-
omy has provided great opportunities for
foreign investors like Starbucks. However,
economic policies that are peculiar to
China mean that investors have to be flexi-
ble and understand the special difficulties
associated with investment. For example,
MAY 2005
EXPORTING A NORTH AMERICAN CONCEPT TO ASIA CQ CASES
special government investment licenses
are still necessary and obtaining them is
sometimes difficult, especially in some
smaller cities where bribery is common.
The Chinese
Sociocultural Environment
With the adoption of market-driven
economic policies, more Western compa-
nies have been entering the Chinese mar-
ket. U.S. food companies such as McDon-
ald’s, KFC, and Pizza Hut have been able
to capture the Chinese customers’ taste.
The young generation of Chinese custom-
ers are the most susceptible to the Western
30
trend. Because of rigid governmental
legislation that allowed Chinese couples
to have just one child, young couples have
considerable purchasing power. They
want to spend their money on leisure
activities, such as going to American-style
fast-food restaurants. Only a few decades
ago, in a less open China, almost nobody
had heard of American icons such as
McDonald’s. Today, the lives of Chinese
people are full of foreign names. A girl
wants a Barbie for her birthday gift. Cou-
ples celebrate their wedding anniversary
in a Korean restaurant. Busy office work-
ers order a pizza for lunch. The increas-
ingly wealthy Chinese people are willing
to pay more for new experiences and
better-quality products and services.
The change of culture influences many
aspects of people’s lives. For example,
China has traditionally been a tea-drinking
country. Most people started to recognize
coffee in 1980s from Nestlé’s slogan,
“tastes great!”31 However, twenty years
later, a new Chinese generation not only
drinks coffee but requires that it be of high
quality. They want gourmet coffee instead
of instant coffee, especially those in the
wealthy classes. The typical consumers of
the expensive foreign brands are a part of
Cornell Hotel and Restaurant Administration Quarterly 279
CQ CASES EXPORTING A NORTH AMERICAN CONCEPT TO ASIA

Exhibit 1:
Chinese Beverage Market—Share of Volume and Sales by Segment, 1999
Volume Sales
Segment Percentage Segment Percentage

Tea 42.8 Distilled spirits 27.6

Beer 25.1 Beer 26.9
Soft drinks 10.8 Soft drinks 13.2
Distilled spirits 7.6 Tea 7.6
Bottled water 5.8 Others 7.0
Others 4.4 Bottled water 6.1
Fruit and vegetable 2.2 Fruit and vegetable 5.8
Milk 0.9 Milk 3.0
Wine 0.4 Wine 2.7
Coffee 0.0 Coffee 0.1
Source: Press Release, Beverage Market in China, http://www.beveragemarketing.com/news2i.htm (accessed Novem-
ber 28, 2002).

an expanding middle class comprising tea-processing companies active in the

wealthy and educated young people who
are enthusiastic about chasing “taste” and
“fashion.” They use Gucci bags, Rolex
watches, and Chanel perfume. They fre-
quent bars, enjoy vintage wines, and travel
abroad once a year. Spending money on
expensive things helps these consumers
establish themselves as part of their social
group.32
Like many rapidly developing coun-
tries, the income distribution in China is
unbalanced. The income of people in the
cities is much greater than in the villages.
Also, in the cities and villages there is
great disparity between the richest and
poorest citizens. Finally, income levels in
the rich provinces of Guangdong, Jiangxi
and Zhejiang are significantly higher than
in other provinces.33
The Chinese
Beverage Market
Tea, the classic Chinese beverage, rep-
resents more than 40 percent of the total
market volume for beverages (see Exhibit
1). With more than twenty-five hundred
country, production of loose tea in 1998
came to some 665,000 metric tons, of
which approximately one-third was ex-
ported. It was estimated that per capita tea
consumption in 1999 was 27.5 liters (7.25
gallons). Tea bags, and diet and instant
teas constitute only about 1 percent of the
market, while packaged ready-to-drink
tea is becoming more popular in China,
with more than one hundred brands. 34
Coffee competition. There is only one
competitive domestic coffee producer in
China—Li Shen. Due primarily to
weather patterns that are hostile to coffee
growing, total domestic production per
year is only one thousand tons, compared
to more than 1.5 million tons for Brazil,
for example.35 Because it does not rely on
domestic sources, Starbucks does not have
problems supplying coffee beans to its
Chinese outlets. One of the sources of
competitive advantage for Starbucks is its
ability to contract with coffee producers
anywhere. To sell a distinctive espresso
coffee, for example, Starbucks buys the
best coffee beans from Africa, South

280 Cornell Hotel and Restaurant Administration Quarterly MAY 2005


America, and Indonesia, regardless of
price or transportation difficulties.36
Annual sales of coffee in the Chinese
market in 1990 were only 25,537 stan-
dard bags (60kg/bag). This figure in-
creased to 159,000 standard bags in 1995,
and by 2000 it reached 318,000 standard
bags. On a per capita basis, this amount
(0.01467 kg) is tiny compared to the
annual coffee consumption in the U.S
(4.02 kg per person). Nevertheless, China
is still considered to have high market
potential because of the young generation
of wealthy coffee drinkers.
Direct Competition
in China
Zhen Guo Coffee, a Japanese chain,
entered China in 1998. Its first store was
located in Yi Wu because the residents
there owned many automobiles. Indeed,
people drop by Zhen Guo Coffee on their
way to work. Following Zhen Guo,
Starbucks, Yi Shi, Xian Zong Lin of Tai-
wan, and Jie Rong of Hong Kong opened
stores in Shanghai. 37 Once the battle
started, choosing the right location
became the strategic issue for each com-
petitor. In choosing locations, Zhen Guo
focused only on the least expensive ven-
ues, while Starbucks chose the most
expensive locations. Zhang Jianhui, the
general manager of Starbucks Shanghai,
believes that a good location can maxi-
mize market share. Starbucks China has
applied the same strategy used in the
United States to the Chinese market: the
coexistence of several Starbucks locations
in the same area, which stimulates con-
sumption. In Nanjing’s central business
district, for instance, three Starbucks
shops are already in place.
In May 2001, Taiwan’s Wang Wang
Group and Seattle Supreme Coffee
aligned to invest in the Chinese mainland.
MAY 2005
EXPORTING A NORTH AMERICAN CONCEPT TO ASIA CQ CASES
The first Seattle Coffee chain store under
Wang Wang Group opened in Shanghai in
October 2001. Another Taiwanese food
chain, Ding Hao, is said to be interested in
opening a chain coffee store as well. Even
McDonald’s is attempting to enter the cof-
fee business and has opened its own coffee
shop in Beijing.
Starbucks’ Strategy
in China
Consistent with its expansion to other
countries, Starbucks entered the Chinese
market through a joint venture. In Beijing,
Da Wei Sun is the manager of Starbucks’
outlets. Sun grew up in Hong Kong and
obtained a bachelor’s degree in business at
a Taiwan university. After graduation he
went to the United States, where he started
working as a computer programmer in
Texas. In the early 1980s, he became infat-
uated with the McDonald’s business
model, concluding that it had potential
in Asia. In 1984, Sun opened the first
McDonald’s in Taiwan to great success.
From 1993 to 1994, Sun opened a Hard
Rock Café in Taiwan. After two years of
successful operations, Sun sold the Hard
Rock Café and moved his career to the
Chinese mainland. On November 11,
1999, Sun opened the first Starbucks in
Beijing International Trade Center.
Sun believes that Starbucks’ success in
China is associated with two major issues:
“One is to integrate the Western brand
with local environment, and the other is to
give your client a psychological space.”38
That is how Starbucks introduced its cof-
fee to China—by giving people in the cit-
ies a “third space” beyond work and home.
Starbucks has chosen to build its brand
image first among its employees and then
convey this image to consumers. Rather
than mass advertising from the beginning
to introduce its products as other food and
Cornell Hotel and Restaurant Administration Quarterly 281
CQ CASES EXPORTING A NORTH AMERICAN CONCEPT TO ASIA
beverage companies have done, Starbucks
hires enthusiastic people who can build
good relationships with customers.39 This
Asian-influenced marketing strategy is
consistent with the company’s approach in
North America.
Starbucks’ Future
in China
Starbucks now adds eight to nine new
shops per year each in Beijing, Hong
Kong, and Shanghai.40 These affluent
locations have high concentrations of
young, upwardly mobile workers who are
relatively open to Western products. With
a population of more than a billion peo-
ple, China is a major opportunity for
Starbucks. However, the Chinese market
is drastically different from the U.S. mar-
ket. The question of whether Starbucks
can flourish there as it has done in the
United States rests in part on the following
issues:
Coffee is by no means a mainstream 1995): 40-55.
beverage on the mainland. Compared
with tea, coffee is a relative newcomer.
The average annual coffee consumption
is only one cup per person.41 Will coffee
companies, including Starbucks, be able
to shift demand enough to provide a fer-
tile market for their products?
Starbucks is not alone in China. As 17, 2002); Scott Bedbury, “A New Brand
direct competitors continue to expand,
many with Asian pedigrees, will Star-
bucks be an effective competitor?
The Starbucks strategy that led to its 12. “History of Starbucks.”
early successes was crafted for the U.S.
market. Will this strategy be as success-
ful in the Chinese market? Where is the
company vulnerable to attack?
Finally, Starbucks offers premier prod- Company 63 (October 2002): 132.
ucts at premier prices. At present, it is
targeting segments of the population
that can afford its products; however,
economic disparity among classes and
regions means that the market in many
places is limited. What should Starbucks
282 Cornell Hotel and Restaurant Administration Quarterly
do, if anything, to reach out to a larger
percentage of the population in China?
Endnotes
1. “Starbucks Celebrates First Store Opening in
Shenzhen; Starbucks Brings Coffee Passion
and Expertise to Southern China,” Business
Wire.com Archives, October 18, 2002,
www.businesswire.com/cna-index.html (ac-
cessed November 20, 2002).
2. Ibid.
3. Howard Schultz and Dori Jones Yang, Pour
Your Heart into It: How Starbucks Built a
Company One Cup at a Time (New York:
Hyperion, 1997), 29.
4. Ibid.
5. Ibid., 90-115.
6. Ibid., 127.
7. Business Source Premier, Interviews with
Howard Schultz, “Sharing Success,” Execu-
tive Excellence 16 (November 1999): 16.
8. “Starbucks Stir Up Brewing Coffee Culture,”
Jakarta Post (Business Source Premier), June
23, 2002.
9. Bill McDowell, “The Bean Counters,” Restau-
rants & Institutions 105 no. 31 (December 15,
10. Ibid., 52-55; and Scott Hume, “Howard’s
Blend,” Restaurants & Institutions, July 1,
2000, pp. 54-56.
11. Nelson D. Schwartz, “Still Perking after All
These Years,” Fortune, May 24, 1999, pp. 203-
7; Starbucks, Fiscal 2001 Annual Report, p.
19, www.starbucks.com (accessed November
World,” Brand Strategy 158 (April 2002): 30,
1p, 2c; and “History of Starbucks,” www.
starbucks.com (accessed November 16, 2002).
13. Holmes, “Planet Starbucks,” Business Week,
September 9, 2002, pp. 100-106.
14. Ibid.
15. “Speed Meter, Starbucks Is Rolling,” Fast
16. Holmes, “Planet Starbucks,” 100-106.
17. Richard L. Papiernik, “Starbucks’ Profitable
Brew Turns Up Heat on Expansion,” Nation’s
Restaurant News, January 9, 1996, pp. 1, 4.
18. Holmes, “Planet Starbucks,” 100-106.
MAY 2005

19. “Starbucks Celebrates First Store Opening in
Shenzhen; Starbucks Brings Coffee Passion
and Expertise to Southern China.”
20. Schultz and Yang, Pour Your Heart into It, 331.
21. Central Intelligence Agency, World Fact Book
2002 (Washington, DC: CIA, 2002), www.cia.
gov/cia/publications/factbook/geos/ch.html#
Govt (accessed November 16, 2002).
22. Ibid.
23. Ibid.
24. www.golden-age.com.cn/gold1/hjtxt/2002-5/
0507.htm, June 4, 2002 (accessed November
22, 2002).
25. cooltoy.yesky.com/20010515/1249148.shtml
(accessed October 14, 2002).
26. For a discussion of China’s hotel industry in
view of its World Trade Organization (WTO)
membership, see Larry Yu and Gu Huimin,
“Hotel Reform in China: A SWOT Analysis,”
Cornell Hotel and Restaurant Administration
Quarterly 46, no. 2 (2005): 153-169.
27. See www1.cei.gov.cn/hottopic/worldfrm.
asp?class=17 (accessed November 17, 2002).
28. Ibid.
29. Se e c ulture .9c 9c .c om.c n/food/c offe e /
topic_2653.html (accessed November 16,
2002); see also bbs.fudan.edu.cn/cgi (ac-
cessed November 22, 2002); bin/bbs/
bbsanc?path=/groups/rec.faq/Fashion/liu/
xiaozi/M. 1010233881.A, March 15, 2002.
30. Mediachinanet, “Coffee Chain—War in
Cups,” August 23, 2002, marketinfo.
mediachina.net/marketinfo_view.jsp?id=
11160 (accessed November 17, 2002).
MAY 2005
EXPORTING A NORTH AMERICAN CONCEPT TO ASIA CQ CASES
31. Starbuck Dictionary, www.gemag.com.cn/
gemedia/legend/0111021.asp (accessed No-
vember 17, 2002).
32. Competition: marketinfo.mediachina.net/
marketinfo_view.jsp?id=11160, August 23,
2002 (accessed November 28, 2002).
33. J. M. Litwack and Y. Qian, “Balanced or Un-
balanced Development: Special Economic
Zones as Catalysts for Transition,” Journal of
Comparative Economics 26, no. 1 (1998): 1-
25.
34. “ B eve r a g e M a r ke t i n C h i n a ,” w w w.
beveragemarketing.com/news2i.htm (ac-
cessed November 28, 2002).
35. D. H. B. Welsh, P. Raven, and N. Al-Mutair,
“Starbucks International Enters Kuwait,”
Journal of Consumer Marketing 15, no. 2
(1998): 191-97.
36. Ibid.
37. Competition: 2002-08-23, marketinfo.
mediachina.net/marketinfo_view.jsp?id=
11160 (accessed December 2, 2002).
38. www.dzdaily.com.cn/caijing/guanzhu/
200209130753.htm (accessed November 17,
2002).
39. qiye.news.sohu.com/73/24/news203602473.
shtml (accessed November 17, 2002).
40. Starbucks, Fiscal 2000 Annual Report, p. 14,
www.starbucks.com (accessed November 17,
2002).
41. Welsh, Raven, and Al-Mutair, “Starbucks In-
ternational Enters Kuwait,” 191-97.
Jeffrey S. Harrison, Ph.D., is the W. David
Robbins Chair in Strategic Management at the
Robins School of Business at the University of
Richmond (harrison@richmond. edu). Eun-
Young Chang, Carina Gauthier, Todd
Joerchel, Jorge Nevarez, and Meng Wang
were students at the Cornell University School of
Hotel Administration when they participated in
this project.
Cornell Hotel and Restaurant Administration Quarterly 283